Setting the Record Straight

Over the last couple of weeks, I have had the privilege to partake in a constructive dialogue with a number of our members as we continue solicit the return of proxies for the upcoming membership meeting. While most of these conversations were positive, I found myself having to correct some misinformation that is floating around the community. Allow me to take this time to speak to a number of these items that may help some of you who have questions or who are undecided on what to do with your proxy.

The Threshold Amendments

When submitting your proxy, you are voting on a proposal to lower the voting threshold needed to make amendments to our governing documents to a much more manageable level. This has nothing to do with rental restrictions, parking or anything other than the voting thresholds. Presently, any changes our documents require the approval of two thirds of the voting interest. Not only is this unrealistic, it also doesn't conform to the standards used by most Homeowners' Associations. Our inability to lower this threshold will make any necessary future revisions to our documents virtually impossible.

Now, this is not an attempt to give control of the association to a select few individuals. There are provisions within our governing documents and within Florida statutes that are intended to prevent that sort of thing from happening. Even if we lower the voting threshold, we are still required to reach a quorum to conduct business at a membership meeting, which is how new amendments are passed. To reach a quorum, it requires 30% of our voting interest which is 65 units. In addition to that, we have specific notification requirements regarding any changes to our governing documents. In the event changes are proposed, you will be notified in advance and given the opportunity to make a decision on which revisions are enacted.

The board is working in conjunction with our attorney on a set of revisions to our governing documents to address things like rentals, parking, and many other topics to bring our developer created documents up to current standards. These draft revisions are far from complete and have not been released for review to the community. When it is time to do so, it will be done in a public forum for the board and our attorney to go over the details.

There are two topics that I would like to briefly mention as they are the ones I've talked about the most over the last few days. The first has to do with rental restrictions. As I mentioned previously, we are working on some proposals but nothing is set in stone as any revision to our documents will require a vote by our membership. That said, our current documents only require that an owner provide the association a copy of a lease 15-days before it goes into effect. Our board is looking to add language instituting approval procedures that require background and credit checks on prospective tenants. We are also considering adding a moratorium that would prevent new owners from leasing their property within the first two years of ownership. Doing so would deter investors from buying in the community for the sole purpose of renting the property. In an effort to discourage short-term leases and vacation rentals, we are also discussing minimum terms on lease agreements. More will come on this topic when the board has a final draft.

The other item I've spent a lot of time talking about is parking. The board is still working on a long term solution. At our last meeting, the board agreed that at the beginning of the year, we would begin enforcing the "Guest Only" parking spaces. Use of these spaces will require a parking permit and residents will be prohibited from using those spaces. That is the purpose for requiring all residents to register their vehicles with the association. If a resident tries to request a permit for one of their vehicles, the system will automatically reject the request. This is not an attempt to tow more resident vehicles as one person suggested.

Transparency

Following the turnover of the association from the developer, our board has put transparency at the core of what we do. Our board meets regularly on the third Monday of every month. We intentionally chose to have our meetings in the evening to accommodate most working adults. They're held virtually so owners can attend from anywhere they choose. This is the single best way to stay informed as most of the topics that people have questions regarding are discussed regularly at our meetings. The meeting dates are posted on our website as well as the cork board outside the clubhouse.

In addition to our meetings, our website is another valuable resource for information. We are continuing to build it out as we go, but most of what you're looking for is there. The blog is something we are starting to use more frequently to broadcast important information publicly. Our members only area contains a forum for discussion amongst our membership but this is also where you will find much of the board related materials. We post all of the meeting agendas and materials for upcoming board meetings. There you will also find past meeting agendas, materials, and minutes going back to when the site was launched.

All of the governing documents, the cost sharing agreement, and any resolutions passed by the board are available for review in the Policies & Bylaws section of the website.

If you are unable to get an answer to a question that you have, please know that you can always reach out to one of your board members. On the website, there are links for you to contact us directly along with the property management company. Often issues are discussed amongst the members, but rarely make it back to the board. The property manager should generally be your first contact in any situation. If they can't resolve the situation or you run into issues, then your next step should be to contact the board. You can come to a meeting or you can contact us anytime before then. Posting on social media is not a substitute for actually reporting an issue.

Financials

Our association functions like any other business. The services that we provide are dependent on the revenue that we generate through the assessments that you pay every quarter. Which also means that we are not immune to systemic shifts in the economy as demonstrated earlier this year. As a result, the association delayed a number of projects planned for this year until we were certain that our budget was steadfast.

During the second quarter of this year, we saw a sharp rise in the number of delinquencies resulting from the affects of the pandemic. These were stacked on top of some long-term delinquencies that had already been in place prior to turnover from the developer. While most of those that occurred at the beginning of that quarter were resolved in the following months, delinquencies remain an ongoing challenge.

The collection of which is conducted by the association's attorney. We've taken an aggressive stance on the matter placing liens on a number of properties and filing foreclosure on six so far this year. As a result of our efforts, a number of those long-term debts have been paid in-full. While we don't publicly post the contents of our accounts receivable, as an owner you are entitled to that information and we will provide it upon request. This is to ensure we are providing accurate information as this list changes frequently and it also helps to prevent the dissemination of this information to the wrong people.

In addition to our prudence with the budget and aggressively pursuing debts owed to the association, we also started to evaluate some of our largest expenses. If you are unaware, our three largest expenses are the cost sharing agreement, insurance, and landscaping. We bid out insurance every year and are not anticipating an increase at this point. We bid out the landscaping contract earlier in the year and Sunnygrove was the least expensive and with the added budget constraints we had no choice but to maintain the contract. We will not be renewing with them for 2021 and are in the process of receiving bids on the contract.

That leaves the cost sharing agreement which is an incredibly complicated contract we maintain with the Condominium Association. During last year's budget process, the Condominium Association included over $100,000 in capital improvements to the gate area. Uncertain of our own financial stability and following a significant increase in our assessments, we pushed back on the expense which was put on infinite hiatus.

This called into question as to what our obligations were under the agreement, so we had our attorney do an in-depth analysis. During that time, we requested over three years of records from the Condominium Association regarding the shared expenses. Once we had a firm understanding of our obligations, we had our accountant go back and audit the financials. Subsequently, we identified deficiencies in their accounting practices and overpayments to their association. We sent them a letter identifying what we had uncovered and they responded with their attorney. At this point, our attorney is working with theirs to resolve the matter. Due to the confidential nature, that is all we can disclose at this point. We will update you as soon as possible.

The financial security of our association and been the top priority of our board. The last thing any of us wants is an increase in our dues. That's why we've spent so much time and effort reviewing our options. A summary of our monthly financial audit is included in the board materials for each meeting. You can find those archived in the members only section of our website.

Property Management

Whenever I speak to anyone regarding our property management company, they either have no opinion at all or they are absolutely dissatisfied. Which is unfortunately fairly common for many management companies. This summer, we put our management contract out for bid. We received a number of proposals from qualified bidders. We interviewed all of them at a board meeting. The minutes and copies of their proposals are archived on our website. Ultimately, the board decided to retain our current management company for a number of reasons. Those reasons include his knowledge of our association and the complicated relationship we have the the COA. Not to mention the large number of projects that we had underway that also includes a turnover study where his contacts with the developer will play an important role.

While we kept the same property manager, this process was incredibly beneficial for the board and our community. We used this opportunity to renegotiate our contract with Tropical Isles. Having had the opportunity to look at other vendors, we now have a basis for what we should expect from our property manager. Our board laid out a set of expectations when we approved the contract and we will continue to evaluate their performance as we go.

Property managers are often faced with a difficult job because they're the ones who have to tell homeowners the things they don't want to hear. However, the management company is not the final authority on all matters. If you can't find a resolution to a situation or you're not getting the service you expect, those instances need to be escalated to the board. Only if we know about a situation can we work to address it.

Final Thoughts

Rumors are an inevitable part of doing business. However, the onus is in the individual to seek out the answers to the questions they have. We are continually trying to improve our communication with our membership but that only gets us so far. Taking an active roll in the business of our association is the only way to truly be informed. Sometimes finding the right information requires a little help and if you take the time to ask, it will be provided to you. The only way we can make Marbella the best it can be, is by doing it together.

So as one final ask, if you have not completed your proxy you can do so online by visiting: www.marbellatownhomes.com/proxy.